Introduction
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Introduction. Strong performance from Education (96% booked for 2011) PGL UK centres 99% booked for 2011 Strong start to 2012 – 39% booked; PGL UK centres at 63% Excellent trading performance from Meininger; 2 new sites this year Resilient performance in tough operating conditions

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Introduction

Introduction

  • Strong performance from Education (96% booked for 2011)

    • PGL UK centres 99% booked for 2011

    • Strong start to 2012 – 39% booked; PGL UK centres at 63%

  • Excellent trading performance from Meininger; 2 new sites this year

  • Resilient performance in tough operating conditions

  • Traditional travel businesses affected by political disruption (Adventure) and a weak consumer market (Hotel Breaks)

  • Focus on cash generation, margin and cost control

  • Expect to meet management expectations for the full year; interim dividend increased by 5%


Introduction

Neil BrightGroup Finance Director


Introduction

Group results

1 Before amortisation of other intangible assets acquired via business combinations of £0.7m (2010: £0.9m), separately disclosed items of £1.1m (2010: £nil) and, for loss per share, the tax effect thereof of £0.2m (2010: £0.2m)

2 Before IAS 39 mark-to-market revaluations of financial derivatives of £4.2m credit (2010: £1.4m charge) and, for loss per share, the tax effect thereof of £1.1m charge (2010: £0.5m credit)

Slide 3


Introduction

Divisional results

1 Education includes share of Meininger post tax profit of £0.3m (2010: £nil)

2 Before amortisation of other intangible assets acquired via business combinations of £0.7m (2010: £0.9m) and separately disclosed items of £1.1m (2010: £nil).

Slide 4


Introduction

Movement in net debt

Slide 5


Introduction

Net debt & facility utilisation

  • Net debt at 31 March was £148.8m (2010: £129.2m)

  • At 31 March we are approaching peak facility utilisation

  • - minimum cash headroom of £40m in first half

  • - net debt is now reducing as normal

  • Capex increased in H1 due to the timing of spend

  • - full year guidance of £17.1m

Slide 6


Introduction

Balance sheet

* Acquisition of a 50% stake in Meininger for £31.1m in December 2010

Slide 7


Introduction

Interest & currency hedges

  • 16% of Bank debt is at floating interest rates

  • Effective average interest rate c.8.2% due to hedging instruments

  • 21% of Group EBITA in € zone

  • Other net exposure

  • - c. €51m

  • - c. $21m

  • 91% of Group’s € and 99% of Group’s $ requirements for 2011 bought at average rates of €1.17 and $1.58

Slide 8


Introduction

Financial summary

  • Revenue -7.1%-Distorted by timing of Easter and geopolitical events

  • Headline operating loss -£1.4m vs last year--£0.4m vs. last year, pre Middle East and North Africa impact

  • Net debt increased by £19.6m to £148.8m

  • -After £30.8m acquisition in Meininger

  • -Minimum headroom £40m in first half

  • -Sufficient financial headroom to continue to invest in Education

  • Interim dividend increased 5% to 3.35p

Slide 9


Introduction

Martin DaviesGroup Chief Executive


Introduction

Operational summary

  • Core strategy is working; Education share of the Group increasing

  • European sales mix strengthening

  • Strong trading visibility for FY11

  • Sales mix across Group moving to higher margin products

  • Meininger trading above plan on all KPIs

  • Adventure disrupted by geopolitical events

  • Hotel Breaks mitigating difficult trading environment with tight control of cost base

  • Camping continues to experience later booking trends.

Slide 11


Introduction

Education

  • Sales intake currently -1% reflecting a decline in lower margin products; 96% booked overall, UK centres at 99%

  • High visibility enables us to improve

  • gross margin through maximising yields

  • and profitability of owned centres

  • PGL is benefiting from LEA consolidation

  • NST trading well, encouraging signs for 2012

  • Education is 39% booked for 2012;

  • PGL centres at 63%

Slide 12


Introduction

Meininger: creating a European leader

  • 50% stake bought on 16 December for £30.8m

    • Option to acquire remaining 50% over next 2-3 years

  • New Salzburg site (opened mid April) and Berlin (June 2011) increases bed capacity by 23% to 4,550

  • 4 sites secured for 2011/12,

  • increasing capacity by a

  • further 1,600 beds

  • Pipeline of attractive sites –

  • Brussels & Amsterdam in

  • 2012/13

  • Slide 13


    Education division progress on strategy

    Education Division: progress on strategy

    • Roll out Meininger product to key school trip destinations outside Germany

    • Focus on targeting large German education travel market currently underserved by German education specialists

    • Secondary school study tours at c.€270m (UK at c.£180m)

      • Meininger leading provider of bespoke trip accommodation

      • NST/EST working with Meininger to develop tour operator products to German schools market

    • Primary school adventure centre market underexploited

      • Already started to deliver inbound PGL product via relationship with Meininger

      • Significant opportunities exist to offer PGL concept to German schools

    Vision

    No. 1 educational travel provider in Europe

    Slide 14


    Introduction

    Adventure

    • Sales intake currently at -3% due to external events

    • Trading was strong prior to MiddleEast and North Africa events

    • Performance negativelyaffected by these events

      • Estimate full year profit impact of£1.5m including £1m in H1

    • Capacity adjustments made

    • to focus on most profitabletours and destinations

    Slide 15


    Introduction

    Hotel Breaks

    • Sales intake currently at -9%; -6% excluding lost airport hotel contracts

    • Strong focus on tight control of costs across the division

    • Change in sales mix driving improvement in margin performance

    • Superbreak’s retail travel agent sales

    • lower than last year due to tough

    • operating conditions across market

    • Superbreak’s B2C channel showing

    • strong growth from Superbreak.com

    • Bookit adversely affected by the weak

    • Dutch consumer market

    Slide 16


    Introduction

    Camping

    • Sales intake at -5%, versus -3% capacity

    • Difficult trading conditions in the UK and the Netherlands; Germany performing well

    • Trend towards later bookings continues

    • Focus on maintaining high margins

    • by maximising yields and occupancy

    • across the various sales markets

    • Mobile-home life extension

    • programme working well

    Slide 17


    Introduction

    Outlook

    • Strong visibility at Education

    • Excited about Meininger growth opportunities

    • Focus on cash management and cost control at traditional travel businesses

    • Expect to perform in line with

    • expectations for the full year

    • Encouraging signs for 2012;

    • Education 39% booked,

    • PGL UK centres at 63%

    Slide 18


    Introduction

    Appendices


    Introduction

    Trading update

    Capacity changes: PGL UK centres at -1% and Camping at -3%

    Meininger’s performance reflects the anniversary of the Frankfurt site which opened in April 2010

    Slide 20


    Capital expenditure

    Capital expenditure


    Introduction

    Slide 22


    Introduction

    Interest hedges

    • Put in place 2007-2008

    • 16% of bank debt is floating

    • Effective average interest rate is 8.2% at revised margin and bank base rate at 24 May 2011

    • IAS Valuation at 31 March was -£6.7m

    Slide 23


    Introduction

    Disclaimer

    This document contains forward-looking statements with respect to the operations, performance and financial condition of Holidaybreak. By their nature, these statements are subject to risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed or implied because they relate to future events.

    Unless otherwise required by applicable law, regulation or accounting standard, we do not undertake to publicly update any forward-looking statements, whether as a result of new information, future developments or otherwise.

    The financial information referenced in this presentation does not contain sufficient detail to allow a full understanding of the results of Holidaybreak. For more detailed information, please see the full year results announcement for the year ended 30 September 2010 which can be found on the Investor Relations section of the Holidaybreak website – www. holidaybreak.co.uk

    Slide 24


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